Bonds, term deposits, savings accounts, corporate bonds: investors today have more options than ever. On this page, we explain how fixed income products work, how they differ — and what investors should watch out for.
A fixed-rate investment is any capital investment where the interest rate is set in advance for the entire term. The investor therefore knows from day one exactly how much they will receive at maturity — a decisive advantage over variable-rate products.
In the European market, there is a fundamental distinction between debt securities (bonds) and bank products such as term deposits and savings accounts. Both offer predictable returns, but they operate through different mechanisms.
Since the European Central Bank's (ECB) rate-hiking cycle began in 2022, fixed income products have become significantly more attractive again. The current ECB base rate of 3.50% is reflected in comparatively high offers on term deposits and corporate bonds.
A security through which an issuer (government, company, bank) borrows capital from investors. The investor receives regular interest payments (coupon) and the face value back at the end of the term.
A bank product with a fixed term and guaranteed interest rate. Capital is locked for the term. Protected up to €100,000 per bank through the European Deposit Insurance Scheme (EDIS).
A daily-access deposit account with a variable or temporarily fixed interest rate. More flexibility than term deposits, but typically slightly lower interest rates.
Bonds issued by governments are considered especially safe. German Federal Bonds (Bunds) are the reference standard in the eurozone — with correspondingly lower coupons.
Every bond consists of just a few — but decisive — elements. Understanding these parameters is the first step toward making an informed investment decision.
The amount on which interest is calculated and which is repaid at the end of the term. Typically: €1,000 or $1,000 per bond. Also called "nominal value."
e.g. €1,000The annual interest rate the issuer pays on the face value. For fixed-rate bonds, it remains constant. Payment is usually made annually or semi-annually.
e.g. 6.50% p.a.The period until the face value is repaid. Short-term: under 2 years. Medium-term: 2–10 years. Long-term: over 10 years. Generally, the longer the term, the higher the interest rate.
e.g. 31.12.2028Every bond has a unique International Securities Identification Number. Through this number, the security can be found and traded on exchanges.
DE000A383JS3The actual annual total return, taking into account the current purchase price, the coupon, and the remaining term. More important than the nominal coupon for comparisons.
YTM calculatedThe creditworthiness of the issuer, assessed by agencies such as Moody's, S&P, or Fitch. From AAA (highest quality) down to High Yield (speculative). A key driver of the interest rate.
AAA → BB → HYTerm deposits, savings accounts, corporate bonds, and government bonds — which product fits which investment need?
| Feature | Savings Account | Term Deposit | Government Bond | Corporate Bond |
|---|---|---|---|---|
| Typical interest rate (2026) | 2.50 – 3.85% | 3.00 – 4.50% | 2.30 – 3.40% | 4.00 – 10.00%+ |
| Term / lock-in | Daily access | 3 months – 10 years | 1 – 30+ years | 1 – 15+ years |
| Tradable on exchange? | ✕ No | ✕ No | ✓ Yes | ✓ Yes |
| EU deposit guarantee | ✓ up to €100,000 | ✓ up to €100,000 | — (sovereign guarantee) | ✕ No |
| Interest rate fixed? | ⚠ Variable possible | ✓ Yes, fixed | ✓ Yes, fixed | ✓ Yes, fixed |
| Minimum investment | From €1 | From €500 – €5,000 | From €1,000 (exchange) | From €1,000 – €100,000 |
| Issuer risk | Very low (bank) | Very low (bank) | Low (sovereign) | Medium – High |
| Price risk during term | ✕ None | ✕ None | ⚠ Yes (if sold) | ⚠ Yes (if sold) |
| Tax treatment | Withholding tax | Withholding tax | Withholding tax | Withholding tax |
Note: Interest rates are indicative figures for the European market, as of June 2026. Individual offers may vary. This overview is for general information purposes only and does not constitute investment advice.
An overview of typical interest rate offers in the European market by product category and term — as a reference point for investors.
⚠ Important: All listed interest rates are indicative figures and reflect the market as of June 2026. Individual offers may vary. Past interest rates are not an indicator of future performance. Not investment advice.
From subscription to redemption — the typical lifecycle of a fixed-rate bond, explained step by step.
A company, bank, or government decides to raise capital through a bond. Coupon, term, and face value are set. A prospectus is prepared and, where required, filed with the relevant supervisory authority.
During the subscription period, investors can purchase the bond directly from the issuer or through a bank/broker at the issue price (usually 100% of face value).
During the term, the investor receives the agreed coupon payments — usually annually or semi-annually — credited to their securities account or bank account.
Many bonds are traded on exchanges (e.g., Frankfurt, Euronext). Price, yield, and liquidity fluctuate daily — independently of the face value.
At the end of the term, the issuer repays the face value to all holders — provided the issuer remains solvent. The investor has collected their interest and receives their capital back.
In the event of insolvency, bondholders are paid before shareholders as creditors. The actual recovery rate depends on the order of priority in insolvency proceedings. Secured bonds typically have a higher recovery rate than unsecured ones.
Exchange-traded bonds are often available in denominations of €1,000. Some institutional or privately placed bonds start at €50,000 or more per unit — relevant for retail investors to know.
If market interest rates rise, the price of existing bonds falls (and vice versa). Investors who hold the bond to maturity always receive the face value — regardless of the price in between.
Interest income and capital gains from bonds are generally subject to withholding tax in most European jurisdictions, with rates and exemptions varying by country of residence. Always check local tax rules with a qualified advisor.
As with any form of investment, there are both opportunities and risks — presented here as an objective, informational comparison.
The essential vocabulary of fixed income investing — explained briefly and clearly.
A term deposit is a bank product where you place your money with a bank for a fixed term and are protected by EU deposit insurance up to €100,000. A corporate bond is a security issued by a company. There's no deposit guarantee — but interest rates are usually significantly higher, and the bond can be traded on an exchange.
Yes, exchange-traded bonds can be sold at any time through a bank or broker on the secondary market. The sale price depends on the current market price, which is influenced by interest rates, term, and creditworthiness. In thinly traded markets, there's a risk of having to sell at an unfavorable price.
Term deposits at banks within the EU are legally protected up to €100,000 per depositor per bank under the European deposit guarantee scheme (EDIS). If your deposits exceed this amount, the excess carries the bank's insolvency risk without protection.
The higher rate reflects the higher default risk. Government bonds from top-rated countries (e.g., Germany) are considered nearly risk-free — which is why investors accept lower rates. With corporate bonds, there's a risk the company could run into financial difficulty. This so-called "credit spread" is the risk premium the investor receives.
Already-issued fixed-rate bonds keep their set coupon — that's precisely the advantage. Your ongoing interest payments remain constant. However, prices of existing bonds typically rise when market rates fall, since their fixed coupon becomes more attractive. New term deposit and bond offerings, on the other hand, will be issued at lower rates.
Generally yes — but retail investors should pay attention to denominations, liquidity, rating, and prospectus details. Many corporate bonds start at minimum denominations of €1,000, while institutional bonds can start at €100,000 or more. Before investing, it's advisable to read the prospectus and, if in doubt, consult a licensed financial advisor.
Our team is happy to provide further information on fixed income products, current offers, and investment structures — no obligation, fully confidential.
For further information on current fixed-rate investments, corporate bonds, or tailored investment structures, contact us directly:
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